Investment Clubs Manual064 - 55 October 2008 In either kind...

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Unformatted text preview: 55 October 2008 In either kind of issue, fractions may arise and companies do not issue fractions of shares In some instances the fractions are accumulated and sold by the company which may then remit a cash equivalent to entitled shareholders. Money received through such transactions is entered In the Cash Account under Sales of investments. It is shown as reducing the original cost of the shares in the Investment Record. Having dealt with the first eight columns. we now come to the remaining five which are used to provide the basic month~by-month information for the Monthly Assets Statement. The valuation date will be set monthly, or as often as the club meets, and will coincide with: a. The date on which the balance is calculated in the Cash Account; be The date to which the Members’ Capital Account is made up; c. The date the unit value is calculated for the next club meeting. The selling price per share makes allowance for the fact that the prices quoted in newspapers or on Teletext are middle prices, that is an average of buying and selling prices. As a rule it Is a fair approximation to deduct 1% from the published prices, rounding down to the nearest penny. The gross selling value ls simply the selling price multiplied by the number of shares held by the club. Selling expenses are an estimate of the costs that would be incurred by selling, primarily stockbroker’s commission and VAT. The net selling value Is obtained by deducting the selling expenses from the gross selling value. ProShare Investment Club THE MANUAL ...
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